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Stripe cuts internal valuation by 28%

wsj.com

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Re: Stripe cuts internal valuation by 28%

#171

Post by JumpCrisscross »

hef19898 wrote: post #170
JumpCrisscross wrote: post #165

Earlier quoted context omitted.

> Stripe changed its RSU grant structure RSUs are worth less than transferable stock. You can’t get liquidity for an RSU (or nontransferable stock) without using a forward, which may be illegal if you have less than a $10mm net worth. Options yield stock, however, which can be sold. For Stripe’s VCs, on the other hand, employees accepting RSUs makes their stock special. That increases the value of their shares.

RSUs are great at public companies, as soon as they vest they turn into regular shares. At a private company, well, it seems pretty hard to sell any shares in those isn't it?

> private company, well, it seems pretty hard to sell any shares in those isn't it?

It’s a multibillion dollar market that all the banks are active in.

Re: Stripe cuts internal valuation by 28%

#172

Post by [deleted] »

ruffrey wrote: post #133
ldjkfkdsjnv wrote: post #127

Actually 28% is nothing. Most Fintech stocks are down ~75%, this company is still wildly overvalued

Stripe did $12B in revenue last year. If the valuation of $95B dropped 28%, that is $68B. That seems like a fair, if not quite low valuation of a fast growing SaaS fintech company with an excellent product.

[deleted]

Re: Stripe cuts internal valuation by 28%

#173

Post by hef19898 »

JumpCrisscross wrote: post #171
hef19898 wrote: post #170

Earlier quoted context omitted.

RSUs are great at public companies, as soon as they vest they turn into regular shares. At a private company, well, it seems pretty hard to sell any shares in those isn't it?

> private company, well, it seems pretty hard to sell any shares in those isn't it? It’s a multibillion dollar market that all the banks are active in.

I honestly didn't know that... Well, no big surprise since I never had anything to do with shares in private companies my whole life...

Re: Stripe cuts internal valuation by 28%

#174

Post by throw125412423 »

OgAstorga wrote: post #102
radicaldreamer wrote: post #97

Earlier quoted context omitted.

They should still be angry because this company should’ve gone public and made them liquid a year ago.

Shouldn't going public on an unrealistic market cap would cause more issues than benefits? Sure, a healthy exit is ok but later pressure to recover the market cap in the short term can cause heavy structural damages inside any org.

I'd rather have cash in my bank account and work for a company that will suffer structural damage than see my hypothetical net worth go down 60%.

Re: Stripe cuts internal valuation by 28%

#175

Post by jiveturkey »

ztratar wrote: post #44
ushakov wrote: post #41

Earlier quoted context omitted.

isn't that $200k/year in stock worthless anyways?

Can you clarify? How is $200k worth of something ever "worthless"?

As an example, imagine you have $200k of crypto, held in custody at an exchange that has frozen withdrawals.

Re: Stripe cuts internal valuation by 28%

#176

Post by capableweb »

happyopossum wrote: post #147
cco wrote: post #114

Earlier quoted context omitted.

Could you clarify? By any measure we're already in a recession today. I'm certainly no economist so maybe there is some other detail we're missing?

> By any measure we're already in a recession today. Except we are not by the accepted definition of a recession (2 consecutive quarters of negative growth). You can make the word mean something else, but then it’s kinda useless.

The "accepted definition of a recession"? Where are you getting this from?

I understand that some government/finance organizations in specific countries might have some sort of "definition" of the term recession, but in general parlance, "recession" is just when the economy is not doing well.

Some organizations do have indicators like "2 consecutive quarters of negative growth", but doesn't mean it's a universal "accepted definition".

Re: Stripe cuts internal valuation by 28%

#177

Post by jiveturkey »

TechBro8615 wrote: post #7

What is an internal valuation, and does Stripe actually lose anything from lowering it? My cynical experience suggests that companies usually have more to gain by lowering their valuation than they do by inflating it. Apologies if the article already described the possible negative impacts to Stripe caused by a decreased internal valuation. I’m unable to read it since it requires a subscription I cannot afford (due t…

They don't lose anything, directly. It's more a reflection of what's going on with the preferred valuation.

https://www.businessinsider.com/fidelity-cuts-payments-finte...

A lot of comments here are not relevant, because Stripe grants RSUs not stock options.

Re: Stripe cuts internal valuation by 28%

#178

Post by mellavora »

noway421 wrote: post #88
toomuchtodo wrote: post #79

Earlier quoted context omitted.

I work adjacent to payments in fintech. I’ve had conversations with largish merchants who have mentioned their intent to attempt to move payment flow to these new rails when available to reduce CC processing costs. Will they? I cannot say for sure, I speak the lens I see through. A real recent quote from a CFO: “why am I handing over 2% of my revenue just to take a payment if I can avoid it?”

FedNow will allow instant bank transfers. That means that you can build a payment system on top of it similar to Windcave Account2Account (that we have here in Australia and New Zealand) Windcave Account2Account is not a full replacement for debit/credit cards. It does not have PayWave (solvable). It has a clunky UX (solvable). It does not do credit transactions (not solvable). It can be a minor headwind to VISA/Mast…

Wonder how FedNow's instant bank transfers will impact crypto; isn't "instant transfer" one of the advantages of i.e. bitcoin?

> FedNow payments will operate year-round for businesses and individuals. Since funds will transfer and settle instantly, all payments are final and cannot be reversed.

https://www.moderntreasury.com/learn/what-is-fednow

Re: Stripe cuts internal valuation by 28%

#179

Post by mellavora »

bpodgursky wrote: post #19
paxys wrote: post #6

Should be cut by 50%+ to be in line with the rest of the tech market, and even more if you are valuing it as a FinTech company. SQ is down 75% since its November peak.

Stripe's growth is still pretty strong. I don't know why you think every tech stock has to move lockstep. Some companies are far better positioned to weather a downturn than others.

> I don't know why you think every tech stock has to move lockstep.

Maybe because of ETFs?

Maybe because of linked market psychology?

I'm sure a professional trader could think of several other factors which would cause shares of companies in the same market/sector/industry would move together.

Lockstep, no, but highly correlated, yes.

Re: Stripe cuts internal valuation by 28%

#180

Post by vmurthy »

kyawzazaw wrote: post #152
vmurthy wrote: post #145

Earlier quoted context omitted.

> So $74b is probably about right or maybe even low? Of course you are assuming that Adyen is somewhat fairly valued :) . That's the problem with comparative valuations IMO. If company A valuation = company B valuation and company A itself is overvalued, it doesn't mean they are both fairly valued,no?

If the public market is suggesting that, not a bad benchmark to have a quantitative figure.

Totally agree. Just something to watch out for. If the market is giving a multiple of 25 today and it drops to 10 in a year , one needs to be aware that’s all
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